Foot Locker swings to Q4 profit, comp growth; to refresh 300 stores in 2025
Foot Locker delivered fourth-quarter earnings and comparable sales that topped analysts forecasts but sales that fell short.
As part of its strategy, Foot Locker has been refreshing its stores to its new design standards. The company will continue its store refresh program in 2025, with plans to update 300 stores on the heels of 400 refreshes last year. The capital-light program features elevated and consistent signage, fixturing to support brand partner storytelling and an improved customer experience
When the 300 updates are completed, Foot Locker will shift its focus to scaling its more comprehensive reimagined (store of the future) concept going forward. It expects to open or convert 80 additional reimagined locations by the end of 2025 on top of the eight it ended with in 2024.
[READ MORE: Foot Locker unveils ‘store of the future’]
"We intend to at least maintain, if not accelerate, that pace of reimagined openings as we look out over the next few years," CEO Mary Dillon said on the company's earnings call, adding that the majority of the reimagined projects will be completed via conversions or relocations of existing locations.
Foot Locker gave downbeat earnings guidance for its current fiscal year, saying it expects consumer and category promotional pressures to remain uncertain into 2025, especially within the first half.
Fourth Quarter
Foot Locker’s net income totaled $49 million, or $0.51 earnings per share, for the quarter ended Feb.1, compared to a loss of $389 million, or $4.13 a share, in the year-ago period. Adjusted earnings per share were $0.86, up from $0.38, and ahead of analysts’ estimates of $0.72 per share.
Total sales fell 5.8% to $2.25 billion, missing estimates of $2.32 billion. (Similar to other retailers, Food Locker benefitted from an extra week in the year-ago period.)
Comparable sales were up 2.6%, more than expected, including global Foot Locker and Kids Foot Locker combined comparable sales growth of 3.6%. Champs Sports delivered its second consecutive quarter of comparable sales growth, with gains of 1.8%.
“Reflecting on 2024 overall, we made significant progress in elevating our in-store experience with our new Reimagined doors and store refresh program, enhancing our digital and mobile capabilities, expanding engagement with our FLX Rewards Program, and leaning into brand building through compelling campaigns and partnerships,” stated Dillon in the earnings release. “Our return to positive comparable sales growth, gross margin expansion, and positive free cash flow in fiscal 2024 serve as proof points that our Lace Up Plan is working."
Foot Locker gave downbeat earnings guidance for its current fiscal year, saying it expects consumer and category promotional pressures to remain uncertain into 2025, especially within the first half.
On the earnings call, Dillon said consumer uncertainty began to pick up in February for a softer start to the year. But she noted customers responded well to the company’s key promotions such as All Star Weekend activations.
“They spend when there’s a call to action, but they’re more cautious in those in-between periods,” she told analysts.
[READ MORE: Foot Locker to celebrate NBA All-Star Weekend at San Francisco store]
For its current fiscal year, Foot Locker expects total sales to be down 1% to up 0.5%. Comparable sales are expected to increase between 1% and 2.5%. Full-year adjusted earnings per share are expected to be in the range of $1.35 to $1.65, below current analyst expectations of $1.77.
“We are confident that our strategies and actions will enable us to achieve our growth expectations in 2025 and are committed to delivering sustainable shareholder value creation,” stated Dillon.
As of Feb. 1, 2025, Foot Locker operated 2,410 stores in 26 countries in North America, Europe, Asia, Australia and New Zealand. In addition, 224 licensed stores were operating in the Middle East, Europe and Asia.
